Rates
could
see
sharper
movements
on
Wednesday
after
Trump’s
State
of
the
Union
address.
The
president
is
expected
to
address
a
number
of
issues
related
to
housing
—
including
his
global

tariff
policy
that
was
upended
by
the

Supreme
Court,
proposed

restrictions
on
large
corporate
homebuyers
and
other
affordability
initiatives.

Deregulatory
efforts,
pending
legislation

Pete
Carroll,
executive
vice
president
of
public
policy
and
industry
relations
at

Cotality,
also
believes
the
Trump
administration
will
announce
deregulatory
efforts
for
homebuilders
and
bank
lenders
and
servicers.
The
new
policies
would
seek
to
ease
constraints
on
credit
and
speed
the

construction
of
more
homes.

“This
likely
means

lowering
or
recalibrating
reserve
and
capital
requirements
introduced
by
the
previous
administration
to
encourage
greater
mortgage
origination,”
Carroll
said
in
a
statement.

Carroll
noted
that
in
2008,
banks
originated
60%
of
mortgages,
a
share
that
has
dropped
to
roughly
35%
today,
according
to

Federal
Reserve
data.
 

“By
lowering
capital
‘risk
weights,’
the
Fed
is
making
it
profitable
for
banks
to
offer
mortgages
again,
which
naturally
drives
down
consumer
costs
through
competition,”
he
added.
“While
this
could
improve

access
to
credit,
the
near-term
impact
on
prices
will
ultimately
be
limited
by
how
quickly
new
housing
supply
can
come
online.”

Carroll
also
thinks
that
Trump
could
expand
upon
the
plan
for
the
GSEs
to
purchase
mortgage
bonds.
“Historically,
such
moves
mark
the
opening
phrase
of
a
broader
intervention
rather
than
a
one-off,
signaling
a
willingness
to
lean
on
housing
finance
channels
to
support
demand,”
he
said.

Rates
have
fallen
slightly
since
Trump’s
prior
announcement,
with
another
“30-50
bps
of
headroom
expected
for
further
drops,”
Carroll
said.

Along
with
Trump’s
policy
moves,
there
are
multiple
pieces
of
federal
legislation
that
aim
to
tackle
housing
supply
and
affordability.
One
of
these
is
the

ROAD
to
Housing
Act,
which
is
expected
to
reach
the
full

Senate
as
early
as
this
week,
according
to
Kimber
White,
president
of
the

National
Association
of
Mortgage
Brokers
(NAMB).

The
bill
was
left
out
of
the
2026
National
Defense
Authorization
Act
(NDAA)
in
December,
but
trade
groups
like
the

Mortgage
Bankers
Association
(MBA)
and
the

Community
Home
Lenders
of
America
(CHLA)
have
urged
lawmakers
to
reintroduce
and
pass
it.

“The
legislation
addresses
barriers
facing
homebuyers
by
strengthening
small-dollar
mortgage
lending,
tackling

appraisal
shortages
and
bias,
modernizing
FHA
manufactured
housing
limits,
expanding
tax-advantaged
down
payment
savings
tools
and
protecting

veterans
from
predatory
loan
practices
while
increasing
awareness
of
VA
benefits,”
White
said
in
a
statement.

“These
reforms
support
first-time
buyers,
rural
borrowers,

manufactured
housing
homeowners
and
service
members
helping
more
Americans
access
safe,
affordable
home
financing.”

Trump’s
speech
could
also
inform
interest
rate
traders
about
the
short-term
direction
of
the
federal
funds
rate.
According
to
the


CME
Group’s
FedWatch
tool,
the
odds
of
a
Fed
rate
cut
next
month
stand
at
less
than
5%.
But
the
likelihood
of
a
25-bps
cut
rises
to
15%
in
April,
43%
in
June
and
46%
in
July.

The
Fed
cut
rates

three
times
in
the
latter
half
of
2025
and
benchmark
rates
are
now
at
their
lowest
levels
since
September
2022.
Regardless,
market
observers
like
HousingWire
Lead
Analyst
Logan
Mohtashami
believe
that
jobs
and
inflation
data

support
lower
rates.